Most new businesses fail. How can we turn this around?
We love success stories. How a humble beginning turned into a major success. But there are far more unheard stories of failures.
There’s a high failure rate in launching ideas, in launching businesses. There are many reasons for that. If you look at the data in more detail, the number one reason given for businesses failing is no customer need. Most people launch businesses and then find eventually or early on that nobody is going to buy what they’re doing. It’s just not the right time for it.
No customers — that’s the biggest reason for failure.
So how can we turn this around? How can we help people find a customer need?
It’s not easy to convince people to look at the customer first of all because the known process business schools, universities, incubators take — and it little bit comes from silicon valley — is to launch your product idea to investors.
If I were to ask somebody, “How can I help you start your business?”, in almost all cases, it would be, “Oh I’m looking for investment.” Which is sort of partly saying, “I’m looking for somebody else’s money to fund my great idea that doesn’t have any customer data showing they want it.”
I really look to validating customer need as the first step. We formalised this to make it more understandable around a philosophy.
Don’t launch your product idea to an investor, because it’s not investors that eventually sustain your business. Take a customer-centric approach. Launch your idea to customers. Validate your idea with them. Long before you build anything.
The whole methodology behind our customer launch philosophy is validating ideas before you build anything. In most cases, you don’t need to build anything for customers to be able to validate your idea.
Don’t think investment first of all. Don’t rush into launching something that YOU think is a great idea. Test it with customer groups. There are easy ways of validating. Do the upfront work and avoid the failure later on.
— Excerpt from an interview with Simon Krystman, Serial Entrepreneur & Mentor for Startups, where he talks about Customer Launch Philosophy from his book ‘In the Arena’.
